Multi-bank FX platforms double market share in last six months

Online multi-bank foreign exchange trading platforms have doubled their market share in the last six months, according to Justyn Trenner, chief executive officer of London-based research and analysis company ClientKnowledge.

“We now believe that online [multi-bank] platforms account for $14 billion of corporate and institutional flow per day,” said Trenner, adding that this represents 7% of wholesale client activity.

Trenner estimates it will take between three and five years for electronic trading – including the use of single-dealer platforms – to become a majority of dealing.

ClientKnowledge surveyed FX buyers and sellers and estimated that 85% of the forex market is still analogue, but Trenner believes multi-bank platforms such as FXall, Currenex and FXConnect will win an increasing share of this business.

ClientKnowledge estimated that FX Connect, which is owned by US bank State Street, is seeing around $7 billion of trade volume per day, with Currenex on $3.5 billion and FXall on $3 billion. Trenner warned, however, that $10 billion of trade volumes per day is what “a platform has to have to become long-term viable”.

“Currenex will get there in the next six months. FXall will get there in the next nine months," said Trenner who was speaking at the FX Week conference in London.